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Biotech Stock Mailbag: Merrimack, Rockwell, Prosensa, Osiris

Just a bit on revenue potential: Rockwell CEO Rob Chioini pegs IV iron sales in the U.S. today at $330 million. He believes the company can sell SFP at 2-3 times the price of IV iron and still lower the overall costs for dialysis clinics.

Bob B. asks:

Wondering how much Osiris Therapeutics' (OSIR - Get Report) skin product is like MiMedx Group (MDXG) in manufacturing? Since MiMedx ran afoul of the FDA, wondering if the same can happen to Osiris.

Short answer is yes, I believe MiMedx's tangle with FDA regarding regulation of its cell-based wound healing products might portend trouble for Osiris, which markets similar products without FDA review and approval. Whether or not FDA cracks down on Osiris or not and when is really impossible to predict.

Let's back up a bit for some explanation. MiMedx's wound-healing products AmnioFix and EpiFix are derived from human amniotic tissue. As long as these tissues are only manipulated minimally during the manufacturing process, FDA considers them to be human cells, tissue and cellular and tissue-based product, or HCT/P, which means no regulatory review as a drug or medical device is required.

MiMedx believed it could sell AmnioFix and EpiFix as HCT/P products, but last month, FDA sent the company a letter stating the agency's belief that these products no longer meet the minimal manipulation criteria. FDA told MiMedx that AmnioFix and EpiFix are now considered "biologic products" that must undergo review for efficacy and safety just like other drugs.

Big problem for MiMedx. The company, of course, disputes the FDA's conclusion and intends to appeal. MiMedx is also raising a stink about competitors, insisting FDA take a closer look at their products which may also violate the HCT/P manufacturing guidelines.

Osiris' Grafix and Ovation are HCT/P products today -- unless FDA concludes otherwise, like it did with MiMedx.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
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